Critical Analysis: NorthWestern (NASDAQ:NWE) vs. Tenaga Nasional Berhad (OTCMKTS:TNABY)

NorthWestern (NASDAQ:NWE) and Tenaga Nasional Berhad (OTCMKTS:TNABY) are both utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Valuation & Earnings

This table compares NorthWestern and Tenaga Nasional Berhad”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NorthWestern	$1.61 billion	2.80	$181.09 million	$2.72	26.99
Tenaga Nasional Berhad	N/A	N/A	N/A	$0.44	32.02

NorthWestern has higher revenue and earnings than Tenaga Nasional Berhad. NorthWestern is trading at a lower price-to-earnings ratio than Tenaga Nasional Berhad, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

NorthWestern has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500. Comparatively, Tenaga Nasional Berhad has a beta of -0.37, indicating that its stock price is 137% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for NorthWestern and Tenaga Nasional Berhad, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NorthWestern	1	2	3	0	2.33
Tenaga Nasional Berhad	0	1	0	0	2.00

NorthWestern presently has a consensus price target of $68.30, indicating a potential downside of 6.97%. Given NorthWestern’s stronger consensus rating and higher probable upside, equities research analysts plainly believe NorthWestern is more favorable than Tenaga Nasional Berhad.

Institutional and Insider Ownership

96.1% of NorthWestern shares are held by institutional investors. 0.9% of NorthWestern shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

NorthWestern pays an annual dividend of $2.68 per share and has a dividend yield of 3.7%. Tenaga Nasional Berhad pays an annual dividend of $0.46 per share and has a dividend yield of 3.3%. NorthWestern pays out 98.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tenaga Nasional Berhad pays out 104.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NorthWestern has raised its dividend for 21 consecutive years. NorthWestern is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares NorthWestern and Tenaga Nasional Berhad’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NorthWestern	10.21%	7.80%	2.69%
Tenaga Nasional Berhad	N/A	N/A	N/A

Summary

NorthWestern beats Tenaga Nasional Berhad on 14 of the 15 factors compared between the two stocks.

About NorthWestern

NorthWestern Energy Group, Inc. provides electricity and natural gas to residential, commercial, and various industrial customers. It generates, purchases, transmits, and distributes electricity; and produces, purchases, stores, transmits, and distributes natural gas, as well as owns municipal franchises to provide natural gas service in the communities. The company operates 6,600 miles of electric transmission and 18,674 miles of electric distribution lines with approximately 395 transmission and distribution substations; and 2,235 miles of natural gas transmission and 5,155 miles of natural gas distribution lines with approximately 133 city gate stations in Montana. It also operates 1,310 miles of electric transmission and 2,365 miles of electric distribution lines in South Dakota with approximately 124 transmission and distribution substations; and 55 miles of natural gas transmission and 2,573 miles of natural gas distribution lines in South Dakota and Nebraska. The company provides electricity and/or natural gas to approximately 775,300 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. NorthWestern Energy Group, Inc. was founded in 1923 and is based in Sioux Falls, South Dakota.

About Tenaga Nasional Berhad

Tenaga Nasional Berhad engages in the generation, transmission, distribution, and sale of electricity in Malaysia and internationally. The company operates and maintains thermal generation facilities and hydroelectric power generating schemes; and manages and operates the National Grid that is connected to Thailand's transmission system, as well as Singapore's transmission system at Senoko. It also supplies fuel and coal for power generation; generates, distributes, supplies, deals in, and sells various energy sources, as well as provides related technical services; develops district cooling systems; operates and maintains co-generation works; manufactures, sells, and repairs distribution, power, and earthing transformers; and develops, owns, and manages dry bulk terminals. In addition, the company provides turnkey contracting of transmission substations; repair and maintenance services to heavy industries and other related services; operation and maintenance services on telecommunication equipment and data centres; higher education, and telecommunication and IT infrastructure solution and services; research and development services in the areas of engineering, information technology, business, accountancy, and liberal studies; and training courses. Further, it offers insurance and reinsurance products, technical and laboratory, consultancy, and other services; manufactures and distributes power and general cables, and aluminum rods; operates an integrated district cooling systems for air conditioning systems of office buildings; assembles, manufactures, tests, reconditions, and distributes high and medium voltage switchgears, and control gears for transmission and distribution of electric power; and operates wind assets. It primarily serves commercial, industrial, and residential customers. The company was founded in 1949 and is headquartered in Kuala Lumpur, Malaysia.